Monday, Oct 05, 2009

Darling, we'll have to sell the pony

Guardian: Middle-class life and debt, even on a good salary

When your big salary is just not enough. A sign of impending repossessions?

Posted by letthemfall @ 04:31 PM (1792 views)
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17 Comments

1. Mikthe20 said...

No shortage of morons who still want to borrow more and no lessons learned according to that article.

Monday, October 5, 2009 04:57PM Report Comment
 

2. jack c said...

Several credit card co's are back in the market place with 0% interest on purchases for 10-12 months - my Son has just had a mailing from Halifax whilst my Daughter has received a mailing from Tesco. The advertising/promotion theme seems to be encouraging people to spread the cost of the purchases over the intial interest free period. I suspect a lot of people will get sucked in if they are eligible for these deals as they attempt to keep the party going at almost any cost.

Monday, October 5, 2009 06:00PM Report Comment
 

3. drewster said...

His mortgage lender has refused to extend his home loan as "it isn't their policy to lend for consolidation because their experience is that people build up the debt again".

I thought that was precisely the policy, at least during the bubble years!

Monday, October 5, 2009 06:32PM Report Comment
 

4. watching with amusement said...

I am impressed by the state of denial:

"Michael denies that he has been profligate:" and then, "he and his partner have bought things for the house, they have been of good quality; he did buy a nice car when he last changed job, and the household has had three or four Xboxes and PlayStations. He also admits that he has never saved for anything: 'If the kids needed a new laptop I wouldn't think anything about ordering it straight away and putting it on my credit card.'"

I am really lost for words. This chap is meant to be in a responsible position and now he's in the position of needing to get interest on his payments frozen. To be perfectly honest, if it's my bank that's lent him the money, I would expect them to rinse him for everything he owes.

Monday, October 5, 2009 06:52PM Report Comment
 

5. mrflibble said...

3. watching with amusement said...

To be perfectly honest, if it's my bank that's lent him the money, I would expect them to rinse him for everything he owes.

I like it, can I come live in your world as the one I am living it feels like pure fantasy ;-)

Monday, October 5, 2009 06:57PM Report Comment
 

6. dude said...

I earn over £60k yet I still anything costing £1 as expensive, and to me a fiver is still a lot of money. I can remember when I knew where every penny was in the house, and, in the 80s, I would walk miles to get the best out of 21p.

My wife calls me tight, but the way I look at the world is if someone wants my money they *have to* give me very good value for money. I'll not pay to park -- I choose to park further away and then walk. I'd rather make my own lunch than go out and pay for it.

For Christ's sake, it's my money. If you want some of it you have to work bloody hard to give me value for money. It was hard enough to get it into my mitts, so no one is going to get it easily out of me.

Tight? No, prudent.

Monday, October 5, 2009 08:26PM Report Comment
 

7. britishblue said...

The slightly bigger issue that is effecting several million people is the credit card payment extortion that is going on.

Yes people shouldn't get into debt, etc. But if they do should they be raped when a bank can hold them to mercy and charge them what it likes and increase interest rates just by issuing a letter.. For a number of years people have been able to switch credit cards and pay on average about 5% interest on their outstanding debts. many people could service these quite easily and if it came to the crunch pay their debts off. However, what has happened in the last 6 months is a pincer movement by the credit card companies and banks in that they are all skyrocketing their interest rates upwards. People with perfect credit ratings are being charged 25-30% on their outstanding balances by some of the providers.

Now whether it is morally right to have debts is one argument. Whether it is morally right for a bank that borrows money at low interest rates to double its interest charges to a perfectly good customer is another argument, especially when the borrower is trapped with that lender and the lender knows it.

In the past if someone charged you 25-30% you would move the debt elsewhere. Now because the lending criteria is tightening it is impossible for these people to move these debts. Therefore a large proportion of society is getting further indebted because of bank and credit card interest rates, rather than the debt itself which they could pay off.

This isn't effecting the underclasses who are not credit worthy, but it is firmly effecting the new middle classes and further indebting them.
My view is that the personal credit crisis combined the behaviour of the banks will be one of the biggest factors in the second dip of the recession, which in my view will be more severe and drawn out than the first dip and lead to a dramatic drop in house prices.

Monday, October 5, 2009 09:01PM Report Comment
 

8. wiltshire said...

Of course it's all subjective and everyone has their own ideas about what is or isn't a waste of money. The problem is so many in this country have got sucked into the 'must have the newest version of everything and must have it NOW!!!' lifestyle.

In the past people were often seen as fodder for either factory or battlefield. Well I think in the 21st Century you can add Mall to that list. Just keep everyone shopping for useless trivial 'luxuries' and they'll be too busy to see the real problems in society.

People are so desperate to be seen to have a certain lifestyle they've lost all sense of value and worth. A serious depression might shake some of them out of their mindlessness.

Monday, October 5, 2009 09:04PM Report Comment
 

9. timmy t said...

Britishblue - I take your point but I have limited sympathy. "Kids" don't "need" laptops. No household needs 3 or 4 playstations. No I don't think the banks should be able to rob people blind by jacking up interest rates massively, but this guy couldn't look you in the eye and say he's not to blame. £39K on a credit card is ridiculous.

Monday, October 5, 2009 09:28PM Report Comment
 

10. tenant super said...

I'm with dude @5. We used to laugh at my dad who got married in a jumble sale suit but now I work for my wage I'm damned if I am parting with it easily. I resent handing over money for overvalued goods and services. The last time I bought something new for my home was some linen from Rosenbys when they went into administration.

Spending money on borrowing money at 20-30% APR is madness. I thought there was new regulation which meant that when a credit card co jacks up the rates, they have to give you the option to wind down the account and pay off balance on the current rate? So I don't have much sympathy.

Monday, October 5, 2009 09:33PM Report Comment
 

11. mark wadsworth said...

@ Dude, Tenant Super, well said, so it's not just me then (although I did recently choose to drive somewhere and pay £1 for parking rather than take the 'bus, which would cost me nothing as I have an annual Travelcard that covers that route, hey that was my little luxury for the weekend as I only drive my car every week or two. It's an eleven year old second hand car that cost me two grand, BTW).

I wish there were people in the government who thought like you.

Monday, October 5, 2009 09:56PM Report Comment
 

12. tenant super said...

Abbot Christopher Jamison from TVs monastery writes quite eloquently in his latest book on the subject. I don't agree with everything he asserts but some of this rings true:

"Firstly, greed has its origins in the mental picture we have of our life and its needs. Secondly, if we get that mental picture wrong, it is a potential source of disintegration in the lives not only of individuals but also of communities. .. Our Western culture is saturated with goods. The economically stable individuals and households who make up the majority of our population have more stuff than they actually need. While they might be persuaded to buy some more or different versions of what they already have, business recognises this material saturation and so the present thrust of consumerism is towards selling culture as well as things. Having saturated the world of our material needs, consumerism is now taking over our need for cultural goods such as music, entertainment and even moral purpose.

Let me give an example: Nike has a section of its web site called 'Addicts Gallery' where runners can post comments like this from Raul: "I am at the will of a higher purpose." On the video clip accompanying it, we see Raul go running in Nike kit and then hear him say: "I have plugged into a higher purpose, left this world and come back changed. I am addicted." Even our souls are now consumerised and marketing is taking over not only our material imagination but also our spiritual imagination. So Nike and the other great corporations now inhabit our imagination, the place where greed is generated. Once planted there they can make us endlessly greedy. And that is exactly what they are doing."


I don't think we need to live austere, monastic lives; I too treat myself to little luxuries. Once a week I enjoy a coffee-shop coffee on a cafe on Tottenham Court road with a small group of friends. But it is the social aspect I am treating myself to and think the £2.50 mocha is worth the hour or so of good companionship.

The difference between us and many folk is that we are not addicted to consumption (or endless greed as the Abbot says). I am probably a little bit attached to consumption because I am not a saint, but I have awareness and fight the voices that tell me I need different version of things I already have. The government wants us, needs us, to stay addicted to consumption because our ecominic growth was largely based on ever expanding consumption. Even in history classes I was taught that the depression in the thirties was caused by people saving. If only they had kept on buying goods on HP, it would have all been fine.

Monday, October 5, 2009 10:19PM Report Comment
 

13. the number cruncher said...

Dude, Tenant Supper and Mark

I am with you 100% - sums up my lifestyle. I recycle lots of stuff (my offices's 30 computer network is made from old machines I have fixed and most of my furniture is second hand (good Quality). The list is long of my passion for recycling and reusing.

I am a great fan of freecycle, you should try it. www.freecycle.org

Mrs Number Cruncher thinks I have pathological tightness and it has brought us to the 'verge' a few times.

Nice to know I am not alone

Monday, October 5, 2009 10:22PM Report Comment
 

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16. cynicalsoothsayer said...

@TS If you were really truely tight you could club together your £2.50s and buy a case of Tenant Super or a bottle of whisky to share in one of your houses or on a park bench ;)

£39k on a credit card is only the deposit on a BTL flat apparently.

Monday, October 5, 2009 10:44PM Report Comment
 

17. the number cruncher said...

titaniccaptain @ 14

At least you did not waste it!

Tuesday, October 6, 2009 07:51AM Report Comment
 

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